, BRUXELLES, September A special EU summit called by the French and Italian leaders in Italy next month to boost jobs and jumpstart the bloc’s sluggish economy has been postponed indefinitely, diplomats said on Wednesday.
The delay is a blow to Italian Prime Minister Matteo Renzi and French President Francois Hollande who had called the meeting of EU leaders amid growing global concerns about how to increase growth in Europe.
Italy, which currently holds the EU’s six month rotating presidency, “communicated to the member states that the summit has been postponed ‘sine die’,” an EU diplomat told AFP on condition of anonymity.
Another European source confirmed the delay, saying that October was a “particularly busy month for the Italian presidency and for the EU institutions, so it was decided to postpone the summit.”
EU leaders agreed to go ahead with the special employment summit when they met in Brussels at the end of August. It would have been the first of a series of such meetings during the autumn.
Hollande and Renzi have been pushing the EU to focus on promoting growth and jobs in the 28-member bloc instead of balancing budgets as Germany’s Angela Merkel and others would like to see.
In Paris, a French government spokesman said the delay was due to “issues of timing”.
“I think the Italian presidency wished to delay it for calendar and agenda reasons… there is no other reason,” government spokesman Stephane Le Foll told a briefing.
He added: “This is not a setback for the French presidency.”
– Jobs and growth –
Jobs and growth have been named as priorities for the incoming European Commission of Jean Claude Juncker, which will rule the roost in Brussels for the next five years.
Unemployment in several member states remains at record levels, particularly amongst the young, with much of the blame being put on austerity policies implemented to meet the EU’s strict rules on deficits and public debt.
The spectre of a deflationary spiral — in which falling prices cause businesses and consumers to delay purchases, reducing demand and prices and pushing up unemployment — is also a worry.
Eurozone inflation was at 0.4 percent in August, slightly higher than an original estimate which had pushed the European Central Bank to open the cash floodgates, but still way below the bank’s target of 2.0 percent.
The sickly eurozone’s slow recovery from its debt crisis is a particular concern.
The Organisation for Economic Cooperation and Development warned on Monday that the eurozone is a drag on the global economy, even more than increased tension over conflicts in Ukraine and the Middle East, and uncertainty over the future of Scotland.
“Continued slow growth in the euro area is the most worrying feature of the projections,” the OECD said.
The jobless rate in the EU improved slightly to 10.2 percent from 10.3 percent between May and June, according to the latest available figures, with 25 million people out of work.
Unemployment in the 18-nation eurozone fell to 11.5 percent in June from 11.6 percent in May, hitting the lowest level since September 2012, but still high, the Eurostat statistics agency said.
The eurozone edged out of recession in mid 2013 but growth since then has been modest, making a dent in record high unemployment only very slowly to the dismay of EU leaders under pressure to produce jobs.